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GBP - PM Starmer remains under pressure
The Pound fell against the Euro from an open of €1.1516 to €1.1484, having scaled a four-month high of €1.1600 just last week. The currency was carried to that level by the momentum of the positive post-budget relief rally and survey data showing the economy was picking up genuine momentum in the new year. However, a combination of renewed political risks and a 'dovish' steer from the Bank of England on Thursday turn the Pound's outlook on its head.
Pressure is mounting on UK PM Keir Starmer after ally Morgan McSweeney resigned over the Mandelson ambassador appointment, raising questions about Starmer’s judgement amid further scrutiny and looming elections. Alongside a dovish BoE shift, this is weighing on Sterling, with GBP/EUR targeting €1.1440 and risk to €1.1363 if leadership changes intensify.
Weekly Data:
13th February
GDP M/M - 7am
EUR - Trying to make Europe look more attractive
EUR/USD has bounced on the China–US Treasury story, with Europe seen as the best alternative to US markets. Leaders meet Thursday to discuss reforms, though expectations are low; any real progress would be Euro-positive. Stretched long positioning is the main near-term constraint, but bias remains toward €1.1900, with Wednesday’s NFP likely to set the week’s direction.
No major data
USD - Push and pull factors weigh on the Dollar
The Dollar starts the week softer as strong global risk appetite and resilient overseas markets weigh, led by equities and Japan after the LDP’s landslide win. Contained JGB fallout and higher BoJ rate pricing risk turning this into a “Buy Japan” story, with USD/JPY capped near 158. At home, weaker US labour data adds pressure, with Wednesday’s NFP and other soft data this week key risks for the Dollar.
Bloomberg reports China has urged banks to curb US Treasury exposure, a sensitive signal amid rising Dollar diversification. With risk appetite holding, the Dollar looks set for a down week, with DXY targeting 97.00/05 after stalling near 98.00.
Weekly Data:
10th February
Retail Sales M/M - 13.30
Core Retail Sales M/M - 13.30
11th February
Non-farm Employment Change - 13.30
Unemployment Rate - 13.30
Average Earnings - 13.30
12th February
Unemployment Claims - 13.30
13th February
CPI M/M - 13.30
CPI Y/Y - 13.30
Core CPI M/M - 13.30
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